City of London holds on to lead position in UK economy

Despite the fall-out from the banking crisis, the City of London has stretched its lead as the strongest economy in the UK over the past decade, according to research by UHY Hacker Young, which suggests it has grown at double the speed of the national average since the credit crunch

The firm calculates the City’s growth rate in gross value added (GVA) was 24% since 2008, increasing to £292,855 from £236,356 per head. Over the same period the national average was just 12%, from £22,873 to £25,601. 

GVA is a measure of an area’s contribution to the UK economy based on the value of the goods and services it produces per capita.

UHY Hacker Young says the City still has the highest amount of GVA in the country, with the remaining areas in the top five, which are all located in central London. The City’s GVA is still over a third, or £71,700, ahead of its nearest rival, Westminster.

The City is now also 1,900% ahead of the poorest performing urban area, the Wirral, which had a GVA of just £14,523 per person.

UHY Hacker Young’s analysis suggests that in addition to maintaining its core financial services industry the City has also, since the crisis, reinvented itself as a centre for ecommerce and fintech services.

Colin Jones, partner at UHY Hacker Young, said: ‘When the crisis was at its height, many predicted a decline in the importance of the City’s economy, but instead it has proven to be resilient and still easily outpaces other major UK cities. Indeed, its growth is still primarily driven by its huge wholesale financial services industry.

‘On the eve of the start of Brexit negotiations the City, ironically, looks healthier than ever. However, it remains to be seen whether Brexit will prove to be the City’s next existential crisis as firms debate whether to relocate offices to other European cities such as Frankfurt and Paris.’

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